Chapter 6 target markets

CHAPTER 6

TARGET MARKETS

Market & Market ID All people who share similar needs and

wants and who have the ability to purchase a given product are a MARKET.

You can be part of the market for video games, but not be a part of the market for an expensive car. Even though you may want it, you may not have the means to buy one.

Consumer Market The consumer market consists of consumers who

purchase goods and services for personal use.

Needs and wants reflect their lifestyles

Consumers are interested in products that will:Save them moneyMake their lives easier Improve their appearanceCreate statusProvide satisfaction

Organizational Market AKA Business to Business market

Includes all businesses that buy products for use in their operations

Goals and objectives of business firms are different than the consumer market.Improving profitsImproving productivityIncrease salesDecrease expensesIncrease efficiency

Market Share A company’s MARKET SHARE is its

percentage of the total sales volume generated by all companies that compete in a given market.

Knowing market share helps companies analyze their competition as well as their status in a given market.

Market Share A company with a large market share

can afford to take risks that other companies cannot.

Market Segmentation Businesses look for ways to sell their

products to different consumers who may be potential customers.

This involves SEGMENTING, or breaking down, the market into smaller groups with similar characteristics.

Market Segmentation

The process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs.

Market Segment

Gender-Based Segmentation (Page 274)

TARGET MARKET SELECTION PROCESS

The goal of market segmentation is to identify the group of people most likely to become customers.

The group that is identified for a specific marketing program is the TARGET MARKET.

WHEN A BUSINESS DOES NOT IDENTIFY A TARGET MARKET,

ITS MARKETING PLAN HAS NO FOCUS.

UndifferentiatedTargeting Strategy

Homogeneous Market

Figure 10.2

Undifferentiated strategy satisfies most customers with a single marketing mix

Courtesy of The Beef Checkoff Program

Concentrated Targeting Strategy Through Market Segmentation

Figure 10.2

Heterogeneous Market

Differentiated Targeting Strategy Through Market Segmentation

FOUR SEGMENTATION VARIABLES:

Figure 10.3

Demographic Variables Age Gender Race Ethnicity Income Education

Occupation Family size Family life cycle Religion Social class

Gender is a common target in marketing to a demographic

Reprinted with permission of The Dial Corporation.

Family Life Cycle Stages

Source: Jason Fields, “America’s Families and Living Arrangements: 2003,” Current Population Reports, U.S. Census

Bureau, 2003.

Geographic Variables Climate Terrain City size Population density Urban/rural areas

MicromarketingAn approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets.

Psychographic Variables Personality characteristics Motives Lifestyles Cultures and subcultures

More on Psychographic Variables:

*How people live or want to live – health, youth, controlling your life, alternative thinking and/ behavior.

*Assess AIO dimensions: activities, interests, and opinions.

VALS Types (values, attitudes, and lifestyles)

Toothpaste Product Positions

“Don’t put a cold back in your pocket.”

Jumbo, Man-sized Kleenex

Pocket-sized Kleenex

Kleenex® facial tissueKimberly-Clark sought to give the public as many reasons to buy their product as possible….in 1927, K-C proposed a new use for Kleenex®: ‘absorbent kerchiefs.’

Consumers discovered new benefits:

…..and even benefits.

PRODUCT POSITIONING AND REPOSITIONING

Product positioning creating and maintaining a certain concept of a

product in customers minds. Perceptual Mapping Bases for Positioning Repositioning

Perceptual MapFor Pain Relievers

Figure 10.8